Intraday Market Thoughts

EUR Stabilizes Around 1.30 on Rate Cut Speculation

by Ashraf Laidi
Apr 24, 2013 13:19

Today's release of April IFO business climate fell to 104.4, worse than the expected rise to 106.2, while the current assessment index fell by more than expected to 107.2 from the prior 109.9. The expectations index also fell by more forecast, at 101.6 from the prior 103.6. The most notable aspect of this week's deterioration in Eurozone PMIs is the decline in German services PMI to 49.2 from 50.9, which is the first sub-50 print since November. Mounting speculation over ECB rate cut on May 2 meeting emerge on the argument that the combined bite of austerity and slowing global growth will necessitate a rate cut as the only avenue to trigger a cheaper and more competitive euro. But it remains clear that euro depreciation is more beneficial to Germany than the rest of the Eurozone nations due to Germany's high proportion of exports to outside the Eurozone.  We issued new Premium trades trading note on EURUSD alongside the latest MONTHLY chart. 1 new trade on USDJPY has been added to the existing long, while 1 new trade on GBPUSD and 2 new longs on GBPJPY ahead of Thursday's UK GDP report. 1 new trade on USDCAD along 2 new charts (weekly & monthly)( have also been cadded to highlight our case for USDCAD. All charts & trades are in the latest Premium Insights.

Act Exp Prev GMT
Business Climate (APR)
104.4 106.2 106.7 Apr 24 8:00
Current Assessment (APR)
107.2 109.5 109.9 Apr 24 8:00
Expectations (APR)
101.6 103.0 103.6 Apr 24 8:00

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